Australia: Software patents will not crash the patent system

Last Updated: 10 April 2014

In November last year, the Full Federal Court (comprised of Justices Kenny, Bennett and Nicholas) had an opportunity to consider whether software patents (more accurately described as "computer implemented inventions") were patentable subject matter under the Patents Act 1990 (Cth) (the Act). The Court heard an appeal of a decision by Justice Emmett in Research Affiliates LLC v Commissioner of Patents1 and this decision is imminent.

We are hopeful that the Court will reject the argument that for an invention to be patentable it must produce a "physical effect" that is qualitatively significant or substantial because:

  • established grounds of invalidity (novelty and inventive step) will ensure that patents for abstract ideas or mere schemes are not granted;
  • any qualitative test would be illogical and cause uncertainty; and
  • Parliament has not seen fit to introduce such a limitation and there is no foundation for it in existing case law.


In order to ascertain whether an invention claims patentable subject matter under the Act, it is necessary to ask whether it is a "manner of manufacture", a phrase that has its origins in a 17th century statute from the United Kingdom that has been the subject of considerable exegesis.

The High Court considered the meaning of this phrase in NRDC v Commissioner of Patents2 and found that an invention needed to result in both:

  • an artificially created state of affairs;
  • in a field of economic endeavour.

It is the first limb of this test that has been raised as a barrier to the patentability of computer-implemented inventions by the Patent Office in the past (discussed in further detail below).

On the last occasion that the Full Federal Court considered this issue, in Grant v Commissioner of Patents3, it found that a method for structuring a financial transaction was not patentable. It held, "A physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation is required." This decision is consistent with a long line of cases that hold that mere schemes, abstract ideas and information are not patentable subject matter.


The Patent Office's antipathy towards computer-implemented inventions crystallized in its 2010 decision, Invention Pathways Pty Ltd4. The Commissioner of Patents held that the "physical effect" (referred to in Grant) "...must be one that is significant both in that it is central to the purpose or operation of the claimed process or otherwise arises from the combination of steps of the method in a substantial way".

The Office, clearly concerned about the consequences of extending patent protection to "business methods" which involve the use of a computer, essentially sought to bolster the test in Grant. Since that time, the Office has relied on this decision in upholding oppositions to numerous patent applications for computer-implemented methods.


Research Affiliates sought a patent for a computer-implemented method for creating an index to be used for weighting an investment portfolio. At first instance, Justice Emmett found that the invention was not patentable subject matter. He held:

While it is true that the index may be stored in the computer's RAM, or on a memory device, or can be transmitted, that can be said of any data generated by a computer. If that were sufficient to satisfy the requirement of any artificially created state of affairs, any computer implemented scheme would be patentable, merely by reason of the fact that it happens to be implemented by a computer.

It seems clear that Justice Emmett was endorsing the Commissioner's view in Invention Pathways. His Honour found that there needed to be a "specific effect being generated by a computer" and that the mere physical effects produced by a computer's ordinary use were not sufficient.


In August5, Justice Middleton delivered his decision in RPL Central Pty Ltd v Commissioner of Patents6. The case was an appeal from a decision of the Commissioner holding that a computer-implemented method for assessing the competency of qualifications of individuals with respect to recognised standards (for example, to assist tertiary institutions to recognize prior learning) was not patentable subject matter.

Justice Middleton recognised that the Office's manipulation of the Grant test had no foundation in law:

...I do not accept that the Australian decisions that are binding upon me in respect of this issue – NRDC, CCOM and Grant – expressly import any such requirement of substantiality or centrality of physical effect.

However, his Honour found that RPL Central's invention would have satisfied any substantiality requirement (which Justice Middleton did not accept existed).

Unlike the Patent Office and Justice Emmett, Justice Middleton was prepared to consider the possibility that an invention may be brought within the ambit of patentable subject matter simply by the inclusion of computer-implemented features.


Justice Emmett and the Office were clearly concerned that granting patents for computer-implemented methods would lead to patentees obtaining and seeking to enforce monopoly rights over abstract ideas, rather than the application of those ideas in the form of tangible and useful products and processes.

However, it seems that Justice Middleton astutely appreciated that:

  1. any attempt to impose a "qualitative" test on the method of application of an idea would result in uncertainty;
  2. such a test would be contrary to the established authorities; and
  3. the robust requirements of novelty and inventive step can be relied upon to weed out patent applications for abstract ideas.

If the Full Court decided to adopt Justice Middleton's approach it may find further comfort in the High Court's recent decision in Apotex v Sanofi-Aventis7, in which methods of medical treatment were held to be patentable. The High Court found that Parliament had ample opportunity to amend the Patents Act to exclude methods of treatment but had not done so.

Equally, with respect to computer-implemented inventions, as Parliament has not seen fit to exclude them from the scope of patentability, the Full Court should be reluctant to introduce an exclusion by imposing a "qualitative test"8. This view is reinforced by the uncertainty that would be created, the absence of authority and the reliance that can be placed on established grounds of invalidity.


1[2013] FCA 71.

2(1959) 102 CLR 252.

3Grant v Commissioner of Patents (2006) 154 FCR 62.

4[2010] APO 10.

5Before the Full Court heard the Research Affiliates appeal.

6[2013] FCA 871.

7[2013] HCA 50.

8As per the Commissioner's decision in Invention Pathways and Justice Emmett's decision in Research Affiliates.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Most awarded firm and Australian deal of the year
Australasian Legal Business Awards
Employer of Choice for Women
Equal Opportunity for Women
in the Workplace (EOWA)

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.